Infosys shares gain 4% on share buyback proposal

17 Août 2017

"The Board of Directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on August 19", said the IT major in a regulatory filing on the BSE.

Following months of speculations that Infosys is likely to consider a proposal for a buyback of its equity shares, the company confirmed they were considering a proposal for the same in its board meeting on August 19.

The outcome of the Board will be notified to the stock exchanges (BSE and NSE) on the same day.

The Infosys share buyback maybe priced at up to Rs 1,200 per share say industry analysts.

The company has cash and cash equivalent worth Rs 23,117 crore as on June 30, 2017, up 2.17% from Rs 22,625 crore in the preceding quarter. The stock of Infosys opened at Rs 1,010 per share, up by Rs 33.20 or 3.40% as against its previous close of Rs 976.80. Buybacks are a better way to reward shareholders, as paying dividends attracts a hefty dividend distribution tax, said the analyst.

Earlier, embroiled in the controversy, the company's director, Kiran Mazumdar Shaw has told DH, "If we don't find the kind of merger and acquisition opportunities that we are looking at, obviously we would look at the buyback of the shares". India's second largest IT firm is expected to buy back shares at a premium from the open market, similar to what TCS and Wipro did.

The company is yet to reveal the details of its buyback even as rival Tata Consultancy Services completed the Rs 16,000 crore buyback it announced in February.